Broadband Cable Association of Pennsylvania

More than 1 million Pennsylvanians enjoy residential telephone service from their cable company.

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November 2, 2012

Communications networks battered by the Atlantic superstorm Sandy continued to improve, even as power failures and sputtering backup generators hampered gains in New York City and other hard-hit areas. The proportion of mobile-phone sites that were still out of service has dropped to 19 percent, down from 25 percent two days earlier, according to the U.S. Federal Communications Commission. Verizon Communications Inc., the largest phone company in the region, said thousands of employees have fanned out across New York and New Jersey to repair damage, though power outages and blocked roads slowed efforts. "The availability of fuel to keep generators delivering backup power to switching facilities and other critical network equipment is an increasing challenge," New York-based Verizon said yesterday in a statement. "Verizon is working with federal, state and local government officials to obtain the fuel crucial to maintaining communications and Internet access."

Sandy, the largest tropical system ever measured in the Atlantic, struck Oct. 29. It killed at least 75 people in the U.S., flooded subway tunnels and knocked out power to as many as 8.5 million homes and businesses along the East Coast, including about half of New Jersey. The storm will cost telephone and cable companies as much as $600 million in repair and cleanup costs, according to James Ratcliffe, a New York-based analyst with Barclays Plc. Engineers and technicians with Verizon restored backup power to four critical facilities in lower Manhattan and one on Long Island that incurred severe flood damage and lost commercial power, Bill Kula, a spokesman, said in an e-mail. The locations included the company's own headquarters at 140 West Street, which became a symbol of Sandy's wrath after Verizon posted a picture of its flooded lobby on the Web.

Verizon has the most exposure to the damage because it has many customers in the Northeast with land-line service, Ratcliffe said in a note. Cablevision Systems Corp., meanwhile, has the biggest portion of its customer base without service. The cable company, which focuses on the New York market, said yesterday that about 1.5 million subscribers can't connect to its service because their power is out. "Restoration efforts in the hardest hit areas - including New York and New Jersey - continue to be more difficult," David Turetsky, chief of the FCC's Public Safety & Homeland Security Bureau, said in a statement. Finding enough fuel for generator-powered equipment is a major concern, he said.

Cablevision, based in Bethpage, New York, has about 3.3 million video subscribers in total. The company said yesterday that the number of customers without power, and therefore without service, had dropped by about 100,000. Across the wider storm-stricken area, cable outages declined to about 12 percent to 14 percent, from an initial rate of about 25 percent, Turetsky said. The agency assessed 158 counties across 10 states and the District of Columbia.

AT&T Inc. was working with New York officials to deploy generator-driven charging stations in the city, Michael Balmoris, a spokesman, said in an e-mail. AT&T and Verizon, the two largest U.S. wireless carriers, invited people to charge their mobile devices at their stores. Sprint Nextel Corp. also was struggling with power failures in New York and New Jersey, Crystal Davis, a spokeswoman for the third-largest carrier, said in an e-mail. In New York City, about three-fourths of the network was working, Davis said. Sprint's networks were fully restored in seven states and the District of Columbia, she said. More than 90 percent were operational in four more states, and 80 percent were restored in New York, New Jersey and Connecticut. T-Mobile USA Inc.'s network was "close to normal" outside of lower Manhattan, the fourth-largest U.S wireless carrier said in a statement. Bloomberg

Carl Icahn has amassed a nearly 10% stake in Netflix Inc., boosting the sagging stock of the subscription video service but also making some wary that the activist investor will make waves for management. The billionaire has quietly acquired about 5.5 million shares since early September, buying stock at an average price of $58 a share - well off its peak of $298.73 in July 2011. The opportunistic Icahn said the company's stock is undervalued, given its influential role in technological changes that are revolutionizing how consumers watch movies and television shows. "You've got a major sea change going on," Icahn said. "All the habits are changing. You're going to have distribution changing the whole entertainment business, and they have the greatest platform."

Icahn said Netflix's online video dominance and 27 million streaming subscribers make it an attractive lure for larger companies that are competing with one another to take advantage of new forms of distribution via the Internet and portable devices. However, Icahn said he would not agitate to force a sale and declined to name prospective buyers. "No way I'm going to do that," Icahn said. "I believe this thing will sell itself. There's going to be - if there's not already - interest in it." Icahn was able to capitalize on Netflix's slumping stock price, which has been sagging amid investor concern over slowing subscriber growth in the U.S. Just last week, the company's stock dropped 11% in a single day after Netflix lowered its guidance for the growth of its domestic streaming service for the year. Wall Street reacted enthusiastically to the news of Icahn's investment, driving the price up to $79.24 on Wednesday, a gain of nearly 14%. The company declined to comment.

Icahn has spent decades roiling American board rooms, taking a stake in such major companies as RJR Nabisco Inc., Viacom International, Time Warner Inc., Yahoo Inc. and Lions Gate Entertainment Corp. Icahn spent three years battling with the management of film and television studio Lions Gate Entertainment, launching numerous tender offers, backing board candidates and filing lawsuits in a bid to take control, oust its chief executive, and potentially merge the company with a competitor such as Metro-Goldwyn-Mayer Inc. The activist investor ultimately admitted defeat in August 2011 and sold back his 33% stake. Lions Gate spent nearly $25 million fighting Icahn in court.

By contrast, Icahn's aggressive move into video game publisher Take-Two Interactive Software Inc. ended quickly and peacefully. A month after he acquired an 11.3% stake in the company best known for the "Grand Theft Auto" series in December 2009, it agreed to give him three of its eight board seats. In the case of Netflix, Icahn said he has no complaints about Chief Executive Reed Hastings' management strategy. Hastings, after missteps in 2011, has led Netflix on a global expansion effort. "I'm not here as a critic of Reed's management - unlike a lot of what I do," Icahn said.

Analyst Vasily Karasyov of Susquehanna Financial Group wrote that Netflix is protected against a hostile takeover, so Icahn will have to work with management to increase the stock price. The Netflix board directors have staggered terms, with one-third of members up for reelection every year. Shareholders cannot call a special meeting to elect new directors. "This all means that to force a friendly deal, two years will be required to gain control of the board (nominate one-third of board this year, and another one-third next year)," Karasyov wrote. Wedbush Securities analyst Michael Pachter said he sees few prospective buyers for Netflix, noting that the company has only a handful of direct competitors: Amazon.com, Hulu and Redbox Instant by Verizon. Of these would-be suitors, only Amazon - which has been investing heavily in its own streaming service - would be a likely candidate, he said. "Nobody's buying it, except maybe Amazon," Pachter said. "I don't think Amazon needed Carl Icahn to make them aware of Netflix." Los Angeles Times

Presidential politics have been very good to Fox News Channel in October. Fox News was tops in prime time for all of cable. The closeset competition in prime time came from No. 2 ESPN, No. 3 TBS, No. 4 USA and No. 5. History. MSNBC ranked No. 6, and CNN came in at No. 18. In full-day ratings for October, only Nickelodeon did better than Fox News. In cable news, Fox News had nine of the Top 10 most-watched programs. The top programs were "The O'Reilly Factor" with 3.9 million, "Hannity" with 3.6 million, "On the Record With Greta Van Susteren" with 3.3 million, "Special Report With Bret Baier" with 2.5 million, "The Five" with 2.3 million and "The Fox Report With Shepard Smith" with 2.3 million. "Rachel Maddow" on MSNBC was No. 10 with 1.6 million viewers. Orlando Sentinel

After months of ignoring Pennsylvania's 20 electoral votes - President Obama counting on them, Republican Mitt Romney seeming to write them off - suddenly both campaigns are all about the Keystone State. Clout hears that Romney may appear at a rally in southeastern Pennsylvania on Sunday afternoon, with Bucks County being the most likely locale. The trip was still being ironed out and may not be finalized until Friday. Romney's pick for the vice presidential post, U.S. Rep. Paul Ryan, will campaign Saturday afternoon at the Harrisburg airport.

A Romney visit here would cap a closing week of the presidential campaign that must have television executives leaping for joy. Romney's campaign on Tuesday said that it would start running commercials in the state for the first time. Obama's campaign quickly followed suit. Then came the charge of the PAC brigade, as pro-Romney political-action committees jumped into the media mix. Restore our Future, Americans for Job Security, The American Future Fund, Americans for Prosperity and American Crossroads all put millions into new commercials in Pennsylvania.

The two campaigns took turns calling each other "desperate." Obama's logic: Romney is flailing in true battleground states, so he had to throw a "Hail Mary pass" in Pennsylvania. Romney's logic: Polling shows the race narrowing, so the campaign is "expanding the map" to take advantage here and in Minnesota and Michigan. "Can we win all of them?" Romney senior adviser Russ Schriefer asked. "Can we win some of them? I think so." Obama senior adviser David Axelrod said that the campaign had a "contingency fund" ready to pay for the late-in-the game efforts. "We're doing it because it's the prudent thing to do," Axelrod said. "We're not going to cede any state in this race." Former President George W. Bush prevailed twice without winning Pennsylvania. His father, former President George H.W. Bush, was the last Republican to win the state, in 1988. The Democratic National Committee on Thursday noted that Republicans have made last-ditch plays for Pennsylvania in every presidential race since 1992. Philadelphia Daily News